Help Horrible 341

[LJoutWest]

My wife and I had our 341 meeting. The trustee took $1800 that we had in our account the day we filed and we have to file our tax return by 2/1/2009 and any return goes to the trustee. Not expecting to get a return so no big deal. Trustee was cordial which was good, then the bad came.

Then when creditors come forward someone with the trustee office comes forward about something on our return. We did not pick this up when we signed but it seems our attorney used our net income and not our gross income to calculate our salaries. Now he has to redo it, and the lady who was there from the trustee office said that would put us over the median and our attorney said our expenses will but us where we need to be.

Now our attorney has to redo the paperwork to prove we qualify. How did we miss this and how did our attorney put in the wrong numbers! Our attorney says not to worry but I have always worried about the means test as we make about $90k a year between us and I am not sure how the median/mean thing works. That and having to raise $1800 by December 1st (our attorney asked that it be close to our dismissal date of 1/19/09 but the trustee said no way). Wasn't as easy as I thought.

So make sure if you have an attorney due your paperwork to check, recheck and check again. Lesson learned. Are we just stressing out too much or will this work out you think?

[OhioFiler]

Where did the $1,800 go? It was obviously a non-exempt asset. Didn't your attorney advise you to anticipate losing it?

[sufferingAZ]

Wow, sorry that had to happen to you and your wife. Strange that the attorney would screw up like that.

[LJoutWest]

That was the amount of money in the checking account the day we filed. I got paid the day before which is direct deposit which is the only way the organization I work for pays. We lose that money because it is the money on the account the day we filed. It could have been worse. If we had filed on the 5th it would have had my wife's bi-monthly net amount of $2500 plus my net of $1800.

He's fixing it so we'll see. As long as the chapter 7 goes through though. At least the 341 is over.

[justbroke]

That attorney made too many errors to just be a fluke. Reads as though the attorney is inexperienced, or at least doesn't have a quality check performed by other staff in the office.

I hope that your attorney can and will take corrective action and make you whole again. (Yes, any money in your accounts on the day of filing, regardless of whether you have written "checks" against it... is ripe for the Trustee. Reads as though the Attorney didn't counsel you that well.)

[Kingxray]

My wife and I had our 341 meeting. The trustee took $1800 that we had in our account the day we filed and we have to file our tax return by 2/1/2009 and any return goes to the trustee. Not expecting to get a return so no big deal. Trustee was cordial which was good, then the bad came.

Then when creditors come forward someone with the trustee office comes forward about something on our return. We did not pick this up when we signed but it seems our attorney used our net income and not our gross income to calculate our salaries. Now he has to redo it, and the lady who was there from the trustee office said that would put us over the median and our attorney said our expenses will but us where we need to be.

Now our attorney has to redo the paperwork to prove we qualify. How did we miss this and how did our attorney put in the wrong numbers! Our attorney says not to worry but I have always worried about the means test as we make about $90k a year between us and I am not sure how the median/mean thing works. That and having to raise $1800 by December 1st (our attorney asked that it be close to our dismissal date of 1/19/09 but the trustee said no way). Wasn't as easy as I thought.

So make sure if you have an attorney due your paperwork to check, recheck and check again. Lesson learned. Are we just stressing out too much or will this work out you think?

Try not to worry too much. We had a similar 341. The trustee was questioning some of our expenses on our schedule J and means test. He also said we didn't supply some paperwork he requested before the 341, which I did supply. Luckily I was smart enough to bring the paperwork with me to the 341. Then when it was time for creditors to come forward my dad's lawyer came up and questioned our means test. The trustee ended up continuing the 341 to a later date until we supplied amended schedules.

Our lawyer told us not to worry and that the 341 went fine even though we did not feel like it did. He said the trustee already has the paperwork we supplied even though he claimed he didn't. He also said just because the trustee wants something changed it doesn't mean we have to change it.

Anyway after several months of continued 341's Pacer finally showed the trustee's report of no distribution and that the 341 was satisfied. So who knows what happened in between but I guess they worked things out. In fact when we were waiting for our turn at the 341 I saw this trustee continue several other 341's for various reasons. Maybe he was just in a bad mood that day. Good luck with your case. I'm sure your lawyer can make the numbers work for you.

[markdel16]

So, wait, they take whatever's in your bank account on the day you file? Even in a Chapter 13?

[justbroke]

So, wait, they take whatever's in your bank account on the day you file? Even in a Chapter 13?

Not in a Chapter 13. They don't just take what's in your bank account. If you have exempted it, or it's otherwise exempt, then they don't take it. However, many Chapter 7 Trustees have asked "how much is i your checking account?"... followed by "write me a check for $XXX right now".

This is why we constantly inform people on this site to make sure they spend down their account on necessities. For example, never file the day after you get a direct deposit. That's just common sense amongst most attorneys. Also, if you do file the day after a driect deposit, make sure that you get money orders to pay those that you "need" to pay right before filing. Make sure your Schedule B shows very little money.

For a Chapter 13, I haven't seen the Trustees do that, but they could if you had significant amounts in there that are not exempted. Or, the Trustee, in a Chapter 13, could have your attorney factor that in as part of the Chapter 7 liquidation test, and pay that over the course of the Chapter 13.

[markdel16]

Oh, okay. That makes sense. I'm assuming the OP wasn't able to exempt the cash in their bank account, which is why it was given up.

I was just afraid as the money I've been saving to pay my future bills, since I'm going to be a Chapter 13, was going to go away, but the Fed exemptions (I'm in PA) will cover that easily.

[LJoutWest]

We're doing chapter 7 so I cannot speak on a chapter 13, but I'm sure others can. In a chapter 7 they will take whatever money is in your account that day. Our trustees get 10% of whatever they take, not sure how the other states do it or if it is the same.

No, we weren't aware that they would take the money, wish I had found this site sooner. The couple before us had like $5 and $12 in two checking accounts so the trustee took nothing form them.

Thanks for the replies, still upset but our lawyer redid the B22A and looks like the numbers will still work for us which is good. He's included our house payment which we don't make but are still legally responsible for right now. Sigh, still have to come up with $1900 dollars (rounded up) and the rent, and . . . make it up, and have a Happy Holidays. Not looking so happy now.

The 341 was not continued, we just have to get our paperwork corrected and in by Monday at the latest. Our lawyer wants it done by Thursday.

[hammyaz]

[LJoutWest]

To be fair, I'm not sure how it would have worked. My wife gets paid 2x a month and makes the most income (paid on the 5th and the 20th). I'm paid on the last day of the month. Guess we should have filed around the 15th or so. Live and learn I guess, and $1900 is a lot less than what the total is we owe so . . . it just comes at a bad time of the year and month. We'll pay the month early, forgo Thanksgiving and I'll don the Santa suit once again to make extra money to pay for Christmas.

One other question, the Trustee asked for Sept., Oct., and Nov., checking account statements within the week. What is he looking for there, any ideas? They did want to challenge our food budget since suffer from Celiac disease and our food bill is much higher than a normal diet. We haven't purchased anything out of the normal, eaten out a few times and that's about it.

[jadams]

In a chapter 7 they will take whatever money is in your account that day.

Just to be clear for others reading, as Justbroke mentioned this is only if it isn't exempted.

Your attorney dropped the ball. He or she should have filed prior to you getting paid, or used an exemption, or instructed you on ways to conserve those funds (i.e. spending it down on necessities).

I had cash in my accounts when I filed, but since it was listed and exempted on my petition there was no problem.

[LJoutWest]

Question on the exemption. The Trustee today and our attorney told us the the Judge we have denies exemptions for the cash in the bank account (our attorney told us he has done this with each of his clients). In refiling our petition to fix the income amounts, our attorney is asking for a 75% exemption on the money in our bank account which is what is allowed and the court can take the other 25% but that would be better than the whole amount. Does that sound correct?

I agree he dropped the ball and needs to make this right.

[justbroke]

This is different by different Districts. The 75%/25% sounds more like a "head of household" thing which would be State specific.